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The borrowing nitty gritty

The borrowing nitty gritty

All loans are written in the name of Magna Trust Company Limited as trustee, with each investor recorded as a beneficiary for their fractional share of the loan and underlying security. Magna Trust Company Limited has been specifically established to issue loans, hold securities and disburse funds on behalf of the investors.

Risk-based interest rates – the Zagga Credit Assessment Score

We don't believe in one size fits all and we don't believe in all borrowers paying the same rate. Because of this, interest rates differ from borrower to borrower, and loan to loan depending on a credit score.

The Zagga Credit Assessment Score is an alpha + numeric grading system that we assign to borrowers based on the loan specifics and the information they have provided – the better the credit history, the better the credit score and the better the interest rate on the loan. If the credit history is not perfect, or the loan to security value ratio (LVR) on the loan is high, the credit score will reflect this, resulting in a higher interest rate to meet the higher risk.

This is just one way we bring transparency and equity to borrowing.

Alpha grading (A–F)

The alpha part of the Zagga Credit Assessment Score considers the borrower’s credit history and their expected ability to service the proposed loan. The best grade is A, while F is the worst. The range is:

  • Lowest risk. Default is considered remote
  • Low risk. Default is considered highly unlikely
  • Moderate risk. Default is considered unlikely
  • Acceptable risk. Default is not anticipated
  • Possibility of default. Risk features merit close attention and scrutiny
  • High risk of default. in the event of changes in the economic and/or business environment

Numeric grading (1–5)

The numeric part of the Zagga Credit Assessment Score considers the loan to security value ratio (LVR). This is the amount of the loan against the value of the security. For example, if the loan amount is $100,000 and the security is valued at $400,000 then the LVR will be 25%. The most secure band is 1 while the highest is 5. The range is:

  • LVR under 20%
  • LVR 20% to 39%
  • LVR 40% to 59%
  • LVR 60% to 79%
  • LVR 80% or greater

How to start borrowing

1 Join
  • create an account
  • provide your details
2 Register
  • verify your identity
3 Apply
  • complete a loan application form
  • provide supporting documents
4 Approve
  • credit assessment and valuation
  • loan offer and acceptance
  • document issuance
5 Settle
  • register security
  • get funded